Painting With Numbers: Apple’s Regional Revenue Mix

Since the release of Apple’s larger-screen iPhone handsets last fall, the company has entered a new era of growth. My forecasting models suggest the company will deliver impressive rates of revenue growth through this fiscal year and through at least FY2016 which commences in late September. While the iPhone currently delivers about 70% of the company’s reported revenue, the resurgent iPhone product line along with the rising popularity of Apple’s Macintosh line of personal computers will boost the rates of growth of constituent accessories and services such as the forthcoming Apple Watch and a new TV service expected this fall.

The fast rates of revenue growth expected through at least FY2016 are due not only to the success of the iPhone, but also Apple’s ongoing geographic expansion. Apple will soon reach one billion product and services customers across the globe with the Macintosh line, the iPad line and the company’s robust eco-system of apps, content and services playing important supporting roles in the company’s fast rates of growth.

Concurrent with the release of December quarter (FQ1 2015) results in January, Apple’s management changed reporting of revenue on a regional basis. Apple eliminated the reporting of revenue of its global franchise of retail stores as a separate regional revenue segment and incorporated the revenue from the stores in the geographic regions in which the stores are located. The company also provided retrospective reports for fiscal years 2012 through 2014.

Apple’s FY2014 Regional Revenue Mix

The graph below illustrates Apple’s revised regional revenue mix for the fiscal year that ended last September. 

For the fiscal year, the Americas and Europe regions combined represented 68% of reported revenue. Greater China, Japan and the Rest of Asia Pacific comprised the remaining 32% of the company’s reported revenue total. Apple’s highest concentrations of retail stores are in the US, Canada and Europe. The reporting of retail store revenue in the regions in which the stores are located provides a clearer picture of revenue activity on a geographic basis. 

FY2014 Revenue Growth By Region

The graph below illustrates the rate of growth by region in a fiscal year in which aggregate revenue rose at a modest 6.95% rate. Greater China was the fastest growing revenue region while Japan also delivered double-digit revenue growth. The Rest of Asia Pacific region realized a revenue decline in the 12-month period.

The Ever-Changing World Of Apple

On Saturday, December 27th, Apple’s first quarter of FY2015 drew to a close. While management has guided to revenue of between $63.5 billion and $66.5 billion in the period, the current Wall Street revenue consensus estimate of $66.46 billion is already pushing against the upper threshold of management’s revenue guidance range. 

Apple’s Global Expansion

Apple manages its business on a geographic basis. The graph below illustrates the regional revenue mix for the fiscal year ended in late September. 

Although in aggregate revenue rose a fairly modest 6.95% in the fiscal year, revenue growth by region varied widely with Greater China and Japan again delivering the fastest rates of growth. The graph below illustrates Apple’s revenue growth rates by region for the fiscal year.

Both Greater China and Japan delivered double-digit revenue growth rates in the period while Europe delivered revenue growth at a rate greater than the aggregate rate of growth for the company as a whole. The Americas region, Apple's largest revenue region, realized revenue growth of 3.95% in the fiscal year with negative growth in the Rest of Asia Pacific region.

Changes In Regional Revenue Reporting

Concurrent with the start of the December quarter (FQ1 2015), Apple is eliminating Retail as an independent revenue region. Results for the retail stores will be incorporated in the revenue totals for the geographic region in which the stores are located. For the year, Apple reported 437 retail stores of which 40% were located outside the United States. On a national basis with retail store revenue geographically assigned, the United States represented 37.7% of revenue and China represented 16.8% of revenue in FY2014. Japan may become a third national region to contribute 10% or more of Apple’s reported revenue. 

Apple Looks East, Looks West For Growth

Over the past few years much of Apple’s revenue growth has been fueled by the expansion of the number of iPhone carriers outside the Untied States. In the first nine months of the current fiscal year, Apple’s revenue moved higher by 5.42% to $140.672 billion. During this time, revenue in Apple’s Americas region rose by only 0.38% to $48.985 billion while revenue rose in the Greater China region by 22.27% to $24.068 billion and in Japan by 13.38% to $11.475 billion. 

The chart below details Apple’s regional revenue mix for the first nine months of the fiscal year that ends on Saturday, September 27th.

During this nine-month period, Greater China and Japan combined to deliver just over 25% of reported revenue while the Americas region represented just over one-third of Apple’s revenue total. 

The graph below illustrates Apple’s revenue growth rates by region over this nine-month period. While Europe’s 5.07% revenue growth was close to the aggregate revenue growth rate of 5.42%, the Rest of Asia Pacific region had a negative revenue growth in the period. Apple’s Retail revenue segment, separate from the revenue activity in the regions in which the stores are located, delivered a 3.64% rate of growth. 

No matter the four-quarter slide in net income that ended in the December quarter (FQ1 2014), Apple has continued to deliver year-over-year revenue growth. The chart below illustrates Apple’s revenue on a quarterly basis, segmented by region, since FQ1 2011.

Apple's Global Picture In 1,500 Words

In the first half of Apple’s current fiscal year, revenue rose 5.22% to $103.24 billion dollars. This is the first time Apple’s revenue surpassed $100 billion in a six-month period and is emblematic of the fact the company’s operations are truly global in scope.

According to the company’s SEC filings, Apple manages its business on a geographic basis. The chart below illustrates the company’s regional revenue mix in the first six months of the fiscal year. 

For the six-month period ended March 29, 2014, nearly 56% of reported revenue was sourced from the company’s traditional strongholds in North America and Europe. Combined, Greater China and Japan delivered 26.19% of reported revenue versus 22.57% of revenue sourced from Europe alone. Currently, the United States and China are the only two countries that deliver 10% or more of Apple’s revenue. Japan is quickly closing the gap and may soon gain entry to this exclusive group of nations.

Apple’s Revenue Growth Rates By Region

The graph below illustrates the rates of growth in each of the company’s regional segments in the first half of the current fiscal year. 

In the six-month period, Greater China delivered revenue growth at a 20.54% rate followed by Japan with a 17.59% growth rate. Europe lagged the aggregate growth rate of 5.22% with a 4.57% revenue growth performance and revenue in the Americas region was virtually static with a 0.04% revenue growth rate. In fact, year-over-year in the Americas region, revenue rose by only $15 million. 

Apple: It’s a Matter of What, Where and Why

For the fiscal quarter ended Saturday, December 28th, Apple will report record revenue and earnings per share. There’s no disputing the popularity of Apple’s iPhone and iPad product lines. As of today Wall Street analysts are expecting revenue of $57.31 billion and earnings per share of $14.05. This is in contrast to revenue of $54.51 billion and eps of $13.81 in the prior-year quarter. 

As the founder of the Braeburn Group, I am currently collecting December quarter estimates from our global network of independent analysts. Although management has guided to revenue in the quarter of $55 billion to $58 billion, the independents by and large are expecting a revenue performance above the upper threshold of guidance. I will be publishing the Braeburn Group Estimate Index for the quarter on Sunday, January 5th. 

However, Apple’s quarterly results are merely a static snapshot of a fast-moving enterprise object. More than a purveyor of independent device lines, Apple has become a customer relationship continuum with a global platform of inter-related products and services. 

Among the factors influencing near-term results are management’s decision to increase the amounts of device sales revenue deferred for recognition in future periods, the pace of the company’s geographic expansion and the seasonal nature of the company’s product refresh cycles. Apple’s growth is best viewed not by quarters but by fiscal years. In today’s article I will look at Apple’s growth across a variety of measures and metrics. 

Apple: It’s A Matter of What, Where and Why

The graph below illustrates Apple’s FY2013 revenue mix by product line. In the fiscal year ended in September, over 72% of the company’s reported revenue was derived from the iPhone and iPad product lines. While this concentration of revenue in two product lines for a company that reported over $170 billion in revenue might on the surface seem alarming, the concentration of revenue is emblematic of Apple’s dynamic product mix and the changing nature of the digital device markets. 

The graph below illustrates Apple’s revenue growth by product line in fiscal years 2012 and 2013. In FY2013 the rates of revenue growth in year-over-year comparisons were impacted by the release of the lower-cost iPad mini and slowing rates of growth in the high-end smartphone market. While the average selling price (ASP) for the iPhone fell from $629 in FY2012 to $607 in FY2013, the average selling price for the iPad fell from $531 to $450. 

Moving into FY2014, the reported ASP for the iPhone will be impacted as much by the recent change in deferred revenue on each iPhone sold as any other factor. Apple’s apparent ability to meet demand for the iPhone 5s more quickly than for any new iPhone release in the past will assist in stabilizing reported revenue per unit sold. 

The Retina display iPad mini, at a higher per unit price than the original, will buttress the iPad’s ASP this fiscal year. In FY2014, there will be a stronger correlation between the rates of unit sales growth and revenue growth than in the slower-growth FY2013 that ended in September.

Apple's iPhone Paradox

On Monday, September 23rd, Apple announced the company had sold more than nine million 5c and 5s handsets in the first weekend of sales. The surprisingly high unit sales number for Apple's newest iPhone handsets caused analysts to rewrite and reconsider their narratives on Apple's prospects for early success.  Speculation turned to talk of high channel supply of the iPhone 5c as the source of the expectedly high unit sales number. Analysts had previously cautioned Apple's apparent unwillingness to release a lower-cost handset for emerging markets would dampen the sales growth potential of the new models. 

Confusing matters even more, on September 23rd Apple filed a Form 8-K reiterating revenue and gross margin guidance for the September quarter and indicating revenue would be near the top end of the revenue guidance range of $34 billion to $37 billion and gross margin would be near the top end of the guidance range of 36% to 37%.

The Issue of iPhone Channel Supply

Apple ended the June quarter with about 11 million iPhone handsets in the global channel while also reporting an increase in component supplies. In the June quarter iPhone sell-through was greater than reported unit sales because Apple reduced channel supply in the quarter from about 11.6 million units at the end of the March quarter. In other words, more iPhones were sold to end users in the June quarter than Apple reported as unit sales. 

In the September quarter one year ago, Apple reported ending channel supply of 9.1 million units. At the time, iPhone 5 supplies were constrained and ending channel supply was below the desired range of 4 to 6 weeks of supply on a look-forward basis. 

Because Apple chose to replace the iPhone 5 after its one year in the market with two new models, the global channel could absorb as many of the new handsets as Apple could deliver. There's no issue with high iPhone 5c handsets shipments. Apple has always reported as units sold shipments to resellers when ownership of the devices change hands, not when those handsets are sold by resellers to consumers. Additionally, the iPhone 5c is sold in five different colors. This necessitates more product in the market as sales begin.

Apple's iPhone Paradox

Selling more than nine million new handsets while reiterating September quarter revenue guidance with millions of 5c handsets awaiting sales to customers might create an apparent paradox. But there's no mystery or conflict in the numbers. Apple's decision to focus its new handset efforts on the top tiers of the smartphone market and forego an aggressive effort to gain market share in emerging markets at this time is in line with Apple's approach to the company's primary product markets.

The graph below illustrates Apple's revenue mix over the first three quarters of FY2013:

iPhone revenue represented 53.8% of the company's reported revenue total over this 39-week period that ended in late June. In FY2012, iPhone revenue represented 50.3% of the company's reported revenue total. In the first three quarters of the fiscal year, iPhone revenue rose15.7% versus 10.7% revenue growth for the company as a whole. In FY2013 which ended on September 28th, revenue from iPhone sales may have reached 55% or more of Apple's revenue total. The iPhone remains Apple's principal revenue and operating income driver. Emerging markets can wait for now as Apple seeks gross margin recovery and a return to net income growth. 

Where In The World Is Apple's Growth?

In the first two quarters of FY2013, Apple realized a revenue growth rate of 14.73% to $98.115 billion dollars. In the first two quarters of FY2012, which included an additional shipping week, Apple's revenue rose 66% year-over-year, setting a very challenging growth comparison for the six-month period ended in March. 

There's no disputing the fact Apple's revenue growth rate has slowed and the company is presently locked in a cycle of lowered rates of revenue growth through at least the June quarter. The consensus revenue estimate for this fiscal year currently stands at $171.44 billion or 9.50% revenue growth. Even more sobering is the conservative revenue growth estimate for FY2014. At this time, the consensus for FY2014 suggests revenue of $188.12 billion and a growth rate of only 9.70%. The consensus revenue growth estimate of 9.50% for this fiscal year is in stark contrast to the 44.58% revenue growth achieved in the fiscal year ended last September. 

Apple manages its business on a geographic basis. In today's article I will look at Apple's revenue by region for the first six months of this fiscal year. Apple's revenue performance by region provides insight into the reasons for the slow rate of revenue growth and clues to the manner in which Apple can reignite growth over the next several fiscal quarters. 

Apple's Revenue By Region

The chart below illustrates the percentage of recognized revenue contributed by each of Apple's six regional revenue segments in the first six months of the current fiscal year. 

In the first six months of the current fiscal year, roughly 58% of Apple's recognized revenue was sourced in the Americas and Europe, exclusive of the retail stores. With the high concentration of Apple retail stores in the Americas and Europe, Apple's revenue growth remains highly dependent on performance in the two geographic regions. 

Apple's Revenue By Region: There's More To The Company's Story

On February 27th Apple will host its annual meeting of shareholders. While much attention is being paid to the company's holdings of cash and marketable securities and the recent sell-off in the share price, very little attention is focused on the company's organic growth. 

In the December quarter, Apple's  revenue rose nearly 27% on an equal week basis and the company reported record revenue and net income in the 13-week period. The impact of "share creep" from stock-based compensation reduced earnings per share $.06 year-over-year despite a $14 million gain in net income and the 14-week prior-year quarter reduced the rate of reported revenue growth to about 17.7%.

Due to extraordinarily high gross margin in the December and March quarters of FY2012, Apple will report negative earnings per share growth in the first six months of the current fiscal year.  Although I expect sequential margin recovery from the December quarter's 38.63% through the March quarter of next fiscal year, Apple's rate of earnings per share growth in FY2013 will be the lowest rate of growth in the company's recent history. But there's much more to Apple's growth story.

Apple's Growth By Revenue Region

Apple manages its businesses on a geographic basis. With the release of the company's December quarter results, management created an additional revenue region called "Greater China" and now reports revenue from other countries in the former Asia-Pacific revenue region as "Rest of Asia Pacific." 

Illustrated below is the percentage of recognized revenue delivered by each of Apple's revenue regions in the last fiscal year. 

Last fiscal year, both the United States and China represented more than 10% of Apple's reported revenue. The graph below illustrates revenue by region in the fiscal year and the corresponding rates of regional revenue growth.

View Apple By Seasons, Not By Quarters

On October 25th, Apple announced earnings for the 13-week period ended September 29, 2012. For the quarter, Apple reported revenue growth of 27.22% to $35.966 billion and earnings per share growth of 22.98% to $8.67 per share. The earnings per share outcome in the quarter was negatively impacted by accelerated recognition of foreign exchange-related losses. 

In contrast to the September quarterly results, for the fiscal year ended the same date, Apple reported revenue growth of 44.58% to $156.508 billion and earnings per share growth of 59.54% to $44.16. 

View Apple By Seasons, Not By Quarters

The charts below illustrate the quarterly changes in year-over-year and sequential rates of revenue and earnings growth for the most recent twelve fiscal quarters. Apple's high annual growth rates are now concentrated in a six-month season comprised of the company's December and March quarters. The June and September quarters have comparatively slower rates of revenue and earnings growth and represent their own six-month revenue and earnings season. 

Apple's quarterly results are essentially static snapshots of a fast-moving enterprise. Results are best viewed based on annual growth rates and the year-over-year growth rates of the company's two and distinctly different revenue growth seasons.  

Apple's quarterly revenue growth rates FQ1 2010 - FQ4 2012:

Apple's quarterly earnings per share growth rates FQ1 2010 - FQ4 2012:

Apple's Annual Revenue and Earnings Growth Rates

The charts below illustrate Apple's dramatic rates of revenue and earnings growth over the most recent seven fiscal years. The annual rates of revenue and earnings growth will continue to be far more uniform than the rates of quarterly growth depicted in the graphs at the top of the article. The highly seasonal nature of Apple's revenue activity will continue not only because of the refresh cycle for the Apple iPhone, which comprised over 50% of the company's FY2012 revenue, but the influence of changes in the company's regional revenue mix as well.

Apple's annual revenue FY2005 - FY2012:

Apple's annual EPS FY2005 - FY2012:

June Quarter Results: Apple's Melancholy Moment

On Tuesday, Apple reported underwhelming results for the three-month period ended June 30, 2012. For the quarter, Apple reported revenue of $35.023 billion and earnings of $9.32 per share, representing 22.58% revenue growth and eps growth of 19.57%. The fiscal quarter's outcome, against expectations of much stronger growth, represents Apple's melancholy moment and a slow-growth period in a six-quarter era of exceptional growth that began with the first quarter of the current fiscal year. 

Guidance and The Economy

For the current quarter, management offered conservative guidance of $34 billion in revenue and $7.65 in earnings per share. In the June quarter, all of Apple's major product lines, including the iPhone and the iPad, had unit sales results that were impacted by a challenging global economy, particularly in Europe. The iPhone's uninspiring 28% unit sales growth was also influenced by consumer expectations of a pending refresh of the product line. 

Apple's quarterly results represent a static snapshot of a fast-moving company. As much as the June quarter results were a disappointment, the outcome reveals both challenges and opportunities in the fiscal quarters ahead. 

Gross Margin

In the first six months of the current fiscal year, revenue growth zoomed forward at a 66% pace and earnings per share rose 104%. Apple's average gross margin during the six-month period was 45.9%. In the June quarter, gross margin dropped to 42.8% due to the impact of currency fluctuations, the lower price on the iPad 2 and a change in model mix on iPhone sales. Apple's gross margin moving forward may remain closer to the June quarter's outcome rather than return to the very high gross margin reported in the first two quarters of this fiscal year. Moderation in gross margin will move the rate of earnings per share growth closer to the rate of revenue growth in future quarters. 

In the first six months of the current fiscal year, the iPhone represented 55% of Apple's revenue total and the popular iPhone 4S delivered very attractive gross margin. In the June quarter the iPhone represented just over 46% of revenue.  The iPhone's smaller percentage contribution to the quarter's revenue total and the lower price on the iPad 2 lead to a sequential drop in gross margin from 47.37% to 42.8%. Although the successor to the iPhone 4S will generate industry leading gross margin, the change in the company's overall revenue mix and anticipated higher costs for the new flagship handset will influence gross margin throughout Apple's next fiscal year. 

Operating Expenses

Operating expenses, inclusive of stock-based compensation, remained under 10% of revenue in the June quarter. Operating expense discipline continues to positively impact the percentage of revenue that flows to the company's net income line. In the June quarter, about one-third of revenue flowed to the operating income line and about one-quarter of every revenue dollar landed on the net income line.

The iPhone Product Cycle

Throughout the conference call with analysts, management repeatedly mentioned the impact of consumer expectations of an imminent iPhone product line refresh on unit sales in the quarter. Consumers will, by the millions, postpone or delay iPhone purchases and iPhone handset upgrades in favor of waiting on the release of new models.

There are a number of factors that determine or influence the release dates for new iPhone handsets. These factors include production capacity, component supplies, planned releases of iOS updates and contracts with iPhone carriers. None of these factors are changed by consumer expectations for the release of a new iPhone.

At this time, all points lead to a fiscal first quarter (fourth calendar quarter) release of the successor to the iPhone 4S. The iPhone 4S will remain the company's flagship iPhone handset for about 12 full months. Very high rates of revenue growth will be realized in the first two quarters of next fiscal year due to the release of a new flagship iPhone and the expected lower prices on the iPhone 4 and iPhone 4S models. Between now and the release of a new iPhone handset, overall revenue growth will be held in moderation even with a strong September quarter for the Mac and iPad product lines. 

Apple's Revenue Growth: A Dual-Track Bullet Train

Apple is unique among the world's mega caps due in part to the company's extraordinary rates of revenue growth and extraordinary rates of revenue growth matched with consistently high gross margin. Over the most recent six fiscal years, Apple's recognized revenue rose nearly sixfold and earnings per share rose more than twelvefold. In the first six months of the current fiscal year alone, Apple's revenue rose 66.35% to $85.52 billion and eps rose 104% to $26.17 per share. 

At Friday's closing price of $574.13, the shares are trading at a conservative 14 times trailing 12-month earnings of $41.04 with more than $115 in cash standing behind each outstanding share. For investors, understanding Apple's potential for continuing strong growth is at least as important as an appreciation for the company's growth performance over the past six and one-half years. At Friday's closing price and lowly earnings valuation, the market is discounting Apple's continuing growth potential. 

Apple: A Dual-Track Bullet Train

There's no disputing the fact Apple designs and markets some of the world's most sought after consumer products. But Apple's success is driven by more than smart product designs and technological innovation. Relentless geographic expansion is an important catalyst for the company's fast rates of growth. If Apple were a bullet train, it would be a bullet train powered by two parallel tracks. The first track is exceptional product design and the consequential product popularity. The second track is expansion of product sales into new and emerging markets. 

On December 4, 2011, I published an article titled Where Apple Makes Its Money. In that article I looked at Apple's revenue by region for the fiscal year that ended last September. In this article I'm presenting Apple's revenue growth by region for the first six months of the company's current fiscal year. 

Apple's Expanding Global Presence

Apple is now the world's largest distributor of music, a global bricks and mortar retailer and has more than 400 million iTunes customers around the world with online accounts backed by credit cards. By the end of the month iTunes-based app stores will be available to consumers in 155 countries and Apple's fastest rates of revenue growth are occurring in regions outside the United States. 

The chart below illustrates the percentage of revenue contributed by each of Apple's geographic revenue segments during the first six months of the fiscal year that ends on September 29, 2012: 

Apple's Ghost Of Christmas Yet To Come

In the famous novel by Charles Dickens, Ebenezer Scrooge is visited on the night before Christmas by Ghosts of Christmas Past, Present and Yet To Come. The story, which has endured many popular adaptations, ends with the conversion of a miserly and miserable man to a gentleman who carries with him the hopeful and generous spirit of Christmas to the end of his years.

I have followed Apple since the release of the original Macintosh in early 1984. I have witnessed and written about the tragedies and triumphs of the company's past, its present and Apple's potential for growth in the years yet to come. Today I see a storied enterprise with a colorful past befitting its own novel, yet an enterprise that maintains a youthful, almost playful approach to the product strategies that will yield success in those years yet to come.

Apple's Ghost of Christmas Past

I remember a time when the word "beleaguered" had become a de facto prefix to the company's corporate name. The company that many consider the first modern tech industry IPO and the company that claims to have ignited the personal computer revolution became stodgy and stubborn like the character in the Charles Dickens novel.

In the mid-1990's Apple didn't lose its leadership in the PC market because Windows PCs were better. Apple lost its leadership because the CEO at the time bet on the brand name rather than innovation to deliver revenue and margins. The Performa line of Macintosh computers nearly drove the company to oblivion.

It was a twist of fate and a combination of products for content creation and content consumption that reversed Apple's fortunes. The return of Steve Jobs, the nimble and diminutive iPod, the iTunes music store and a revamped line of personal computers sparked one of the great corporate revival stories of the past one hundred years. It was innovative thinking that started Apple and it's the continued spirit of innovation that recently delivered the company's first $100 billion fiscal year.

Although Apple has invested heavily in building global brand awareness, innovation is delivering record revenue and earnings, not the brand name. Apple has learned from its ghosts of the past.

Apple's Ghost of Christmas Present

For the holiday season of 2011, Apple released a compelling line of new smartphones and the company is a global leader in the emerging market for tablet-style products. This quarter Apple will generate revenue of over $40 billion and earnings of more than $11 per share.

Apple Competes With Device Makers, Not Operating Systems
Contrary to popular opinion, Android handset makers compete more with one another than they compete with Apple. Apple's biggest challenges are maintaining the pace of product innovation and meeting demand with supply when refreshed products are initially released.

Absent innovation Apple can not sustain strong rates of revenue and earnings growth. Only in the absence of adequate supplies of newly released Apple products can competitors establish or sustain a lucrative foothold in any of  the company's primary product markets.

Where Apple Makes Its Money

In the past ten years Apple has transitioned from being primarily a personal computer maker with annual revenue of just over $5 billion to a global enterprise with literally twenty times the revenue, retail store locations around the world and four major product lines including the popular iPhone line of smartphones. Today I'm taking a look at where the company now makes its money. Over 60% of Apple's revenue is currently sourced from the sales of products and services outside the United States.

Management By Geographic Region
According to the company's regulatory filings, Apple "manages its business primarily on a geographic basis." The company's geographic segments consist of the Americas, Europe, Japan, Asia-Pacific and Retail. For Apple's current fiscal year (FY2012) ending in September, I estimate revenue growth of 57% to $170 billion. This is following the 66% revenue rise to $108.249 billion that occurred last fiscal year. The company's strong rates of revenue growth are fueled in part by continuing international expansion.

The US and China: Apple's Revenue Leaders
When Apple retail store sales are assigned to the countries of sales origin, Apple's FY2011 revenue from US sales comes in at  $41.812 billion. This represents 38.6% of the fiscal year's total. I expect the US to deliver about 37% of reported revenue in FY2012 on revenue growth of at least 50% in the region. As early as FY2013, non-US revenue sources may deliver 67% or two-thirds of the company's top line number. China is the only country outside of the US to deliver over 10% of recognized revenue in FY2011. China's $12.472 billion in revenue represented 11.52% of the company's $108.249 billion total.

In fiscal years 2011 and 2010, revenue growth in the Asia-Pacific segment exceeded 150% and in FY2011 Asia-Pacific delivered almost 21% of the company's recognized revenue. In FY2012, I expect the Asia-Pacific region, inclusive of China, to surpass Europe in revenue generation and become Apple's second largest geographic revenue segment.

The pie chart below illustrates each geographic segment's percentage contribution to Apple's revenue in FY2011. The numbers include retail store sales as a separate geographic segment as formally reported by Apple:

Apple's Expanding Global Reach

Over the most recent four fiscal quarters ended in June, Apple reached $100 billion in revenue. In this four-quarter period revenue rose at the rate of 75.73% and eps rose 90.2%. Apple's revenue growth is fueled not only by the popular iPhone and iPad which accounted for 61% of the $100 billion in revenue, it's also fueled by a broadening of the company's global reach.

Apple manages its business on a geographic basis. In this article I'm providing an overview of Apple's sales by region for the first nine months of the current fiscal year ended in June. During this nine-month period revenue rose 78.2% to $79.979 billion and operating income increased 93.85% leading to an eps gain of 96.2% over the prior-year period. Apple's remarkable cost discipline kept operating expenses under 9% of revenue in the June quarter and sustains the rates of eps growth above the rates of growth in revenue.

While it's easy to view Apple and Apple's revenue and earnings growth as a function solely of the company's popular products, further study indicates the company's expanding global distribution of products, including new iPhone carriers and new retail stores are important components of the company's continuing success.

The graph and table data below detail sales and operating income by region and illustrate Apple's broadening global reach as the iPhone, iPad and Macintosh line of personal computers are made available to a growing number of the world's consumers. 

	Revenue Thru	Revenue Thru	% YOY	Operating	Operating	% YOY
Region	6/25/2011	6/26/2010	Gain	Income 2011	Income 2010	Gain
Americas	28,667	17,312	65.59%	10,250	5,482	86.98%
Europe	20,381	13,234	54.00%	8,414	5,457	54.19%
Japan	4,326	2,580	67.67%	1,996	1,185	68.44%
Asia-Pacific	16,062	5,524	190.77%	6,869	2,553	169.06%
Retail	10,543	6,232	69.18%	2,665	1,447	84.17%
Total	79,979	44,882	78.20%	30,194	16,124	87.26%
Stock-Based Compensation Expense Other Corporate Expenses, net				-870	-655
				-4,244	-2,531
Total Operating Income				25,080	12,938	93.85%